Fiona Murphy catches up with LifeSearch's chief executive Tom Baigrie for the definitive interview on his firm's growth plans and his views on the protection market
FM: Moving onto the protection market. What are your thoughts on the definition controversies we are seeing in the consumer press?
TB: An insurance contract is an insurance contract. If the slate falls off the roof and lands on your head and the contract says it pays for that, then it pays for that. If the contract says it doesn't pay for that, then it doesn't. With medical conditions it's really much harder but the same principle applies.
In terms of the current generation of products, they are very specific. A GP might say you've got a critical illness. There's no reference to the insurance application of that word, rather like people talk about financial advice or money advice services with absolutely no reference to the financial service meanings of the word.
Confusion exists. Because these are life and death matters, because these are desperate times in anybody's life and the money that we offer is so important and so vital, what has to give is the product. The product needs to morph such that more claims are made.
The problem with that is that it is a price-competitive market. There are lots of independents out there who do analysis and decide, including us, on what's best and what isn't. So, the generous claims settlement always has to be paid for in advance by premiums and that is a difficult thing to achieve in an insurance market.
Could it be the ABI? That's a false hope but should there be working parties to determine new industry standards on relaxing definitions such that more claims are paid, definitely. Of course there is a policy which fits that bill really well, income protection. It is a great tragedy that we have not got it into the universally-wanted and bought space.
FM: Should we have a protection trade body?
TB: There were lots of reasons I didn't push hard to see that particular initiative through. LifeSearch is growing like topsy and we don't make huge margins, so I can't deploy vast numbers of people to work on these general things. I also think we've moved on from the idea of trade bodies. We need a body that represents consumers' interests to the market and I think that's where the next initiative has to come from.
I'm not sure that someone as opinionated as me should be necessarily involved. I do think the TISA initiative is a good one.
I think Johnny Thompson is a marvellous man and the challenge there, as always, is that it's just one of a number of strings to the bow and therefore it struggles for air time, rather like protection does in many of the conglomerate insurers, reinsurers or distributors. Nonetheless, TISA has a remarkable history of effective lobbying.
I've been quite rude about MAS's value for money recently but in the later years, MAS was going in the right direction. When [Theresa Fritz] was there I thought its protection work was going somewhere.
On the other hand, MAS was utterly submerged in the pensions challenge. They told me that protection was a long way down the line in terms of them building a kind of panel of people who would go to the protection adviser.
FM: What are your views on FAMR?
TB: I'm not sure FAMR is likely to increase the scope of advice. I'm not sure how one increases the scope of advice but it's a serious challenge and FAMR was a decent first effort. Unless there is some dramatic reaction from the banks or other major players to seize the opportunities it carved out, then that's a problem society will have to come back to.
